HDV vs VYM: Which ETF Is Better in 2026?
A metric-by-metric comparison of iShares Core High Dividend ETF (HDV) and Vanguard High Dividend Yield Index Fund ETF Shares (VYM) — both Dividend Income funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 29, 2026. ~5 minute read.
The Verdict
HDV and VYM compete directly — both are Dividend Income funds chasing the same job in a portfolio. That makes this a genuine either/or: the index each tracks, what it costs, and how it has handled drawdowns are what separate them, not the broad exposure they give you.
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — VYM scores higher: 84.6 (Grade B+) versus 83.4 for HDV. That doesn't make HDV a bad fund; it means VYM currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Head-to-Head: Every Metric
| HDV | VYM | |
|---|---|---|
| Category | Dividend Income | Dividend Income |
| Expense ratio | 0.08% | 0.04% |
| Fund size (AUM) | $13.7B | $96.2B |
| Dividend yield | 2.90% | 2.30% |
| 1-year return | +25.72% | +22.93% |
| 3-year return | +57.17% | +62.93% |
| Volatility | 10.82% | 10.21% |
| Max drawdown | -10.49% | -14.46% |
| Sharpe ratio | 1.92 | 1.76 |
| ETFValuer score | 83.4 | 84.6 |
| Grade | B+ | B+ |
| Overall rank | #8 | #4 |
Bold marks the better value in each row. "Better" is directional only (e.g. lower cost, higher return) — it isn't a recommendation by itself. See the full methodology.
Cost
VYM is the cheaper fund, charging 0.04% a year versus 0.08% for HDV — a gap of 0.04 percentage points (about $4.00/year on a $10,000 position) that compounds meaningfully over a multi-decade holding period. See the ETF Fee Calculator for the exact dollar impact at your investment size and horizon.
What HDV's Fees Cost You
HDV charges an expense ratio of 0.08% a year, deducted automatically from the fund's value. Small percentages compound into real money — adjust the figures below to see the impact on your own numbers.
Assumes a constant gross return and no additional contributions — a simplification, but it isolates exactly what the expense ratio costs. Try the full fee calculator to model contributions and compare any two funds.
Performance & Risk
Over the trailing 3 years, VYM returned +62.93% versus +57.17% for HDV — a gap of about 5.8 percentage points. On risk, HDV has held up better historically, with a shallower max drawdown (-10.49% vs. -14.46%). HDV currently has the better risk-adjusted return (Sharpe ratio of 1.92 vs. 1.76), meaning it delivered more return per unit of volatility taken on.
How Closely Do They Track Each Other?
Over the last 3.0 years of daily returns (750 shared trading days), HDV and VYM show a strong correlation of 0.762 — clearly related, with room to diverge. There is some genuine differentiation here, but not enough to call these complementary holdings. Pairing them mostly concentrates risk rather than spreading it.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.762 | Strong — clearly related, with room to diverge |
| R-squared | 58.1% | 58.1% of HDV's daily moves are explained by VYM's |
| Tracking error (annualised) | 8.35% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | HDV +15.87% · VYM +17.47% | VYM ahead by 1.60 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, HDV finished as much as +5.0 points ahead of VYM at the best extreme and -10.8 points at the worst — a 15.7-point spread between the best and worst year of relative performance. Two funds can correlate tightly day to day and still deliver very different outcomes over any single year you happen to hold them.
Calculated from daily total returns over the trailing 3-year window, recomputed every day this site refreshes. Correlation of 1.00 means the two funds moved in lockstep; 0.00 means their daily moves were unrelated.
Holdings Overlap
HDV and VYM hold 5 of the same companies among their top 10 positions. Those shared names make up 30.4% of HDV and 9.5% of VYM. That's meaningful duplication. The funds aren't interchangeable, but a good share of your money would be riding on the same companies twice.
| Shared Holding | HDV Weight | VYM Weight |
|---|---|---|
| EXXON MOBIL CORP | 8.42% | 2.72% |
| JOHNSON & JOHNSON | 5.68% | 2.30% |
| CHEVRON CORP | 6.42% | 1.51% |
| ABBVIE INC | 5.44% | 1.56% |
| PROCTER & GAMBLE COMPANY (THE) | 4.46% | 1.44% |
Compares the top 10 reported holdings from each fund's most recent SEC N-PORT-P filing, so it understates total overlap — funds tracking similar indexes overlap far more deeply than the top 10 alone can show. Search any company across all tracked funds with the Stock Overlap tool.
Which One Should You Pick?
Lean HDV if…
- Current income matters to you — it yields 2.90% against 2.30%
- You care about return per unit of risk — its Sharpe ratio of 1.92 beats 1.76
Lean VYM if…
- You want the lower running cost — 0.04% vs 0.08%, about $4 a year less on a $10,000 position
- You weight recent results heavily — it returned 62.9% over 3 years against 57.2%
- You want the deeper, more liquid market ($96B in assets vs $14B)
Whichever you pick, holding both at full weight is usually the wrong answer — see the overlap and correlation sections above.
Frequently Asked Questions
Is HDV or VYM better?
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — VYM scores higher: 84.6 (Grade B+) versus 83.4 for HDV. That doesn't make HDV a bad fund; it means VYM currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Which has the lower expense ratio, HDV or VYM?
VYM currently has the lower expense ratio (0.04% vs. 0.08%).
Can I hold both HDV and VYM?
Yes, and it may be worth doing. HDV and VYM correlate at only 0.76 over the past 3.0 years, so they behave differently enough that holding both is a genuine diversification decision rather than a redundant one. Size each to the role you want it to play.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.